Tuesday, June 5, 2012

Merchant Credit Card Processing Partial Authorization Guidelines

Merchant Credit Card Processing Partial Authorization GuidelinesIf the balance on a customer's prepaid or debit card account is less than the sale's amount, merchant credit card processing partial authorization procedures make it possible to complete the payment by using the remaining available balance on the card, plus an additional method of payment like cash or another card. This is known as a "split tender" transaction.

If a prepaid card that is used is a gift card or an incentive card, the remaining balance will be automatically communicated to the retailer's point-of-sale (POS) terminal where it can be printed on the transaction receipt.

How Merchant Credit Card Processing Partial Authorizations Work

Here is the sequence of processing a partial authorization request:
  1. The customer's prepaid or debit card balance is smaller than the purchase amount.
  2. The retailer submits a payment processing authorization approval request for the full sale's amount (not including the tip) with a Partial authorization indicator.
  3. Due to insufficient funds, the card issuer sends a partial approval back to the retailer.
  4. The retailer's POS terminal identifies the specific response code and deducts the partially authorized amount from total sale's amount. Keep in mind that in a full service environment, the POS device prints two receipts - one showing the partial authorization transaction amount (without a tip line), and a second one displaying the remaining amount due plus the tip line to show the amount as still outstanding.
  5. The cardholder pays the remaining balance of the sale's amount with another method of payment.
  6. The sale is finalized and a sales receipt is printed displaying the split tender amounts. If in the case of a Balance Return response, the current card balance is also displayed, but it can be formatted as shown below to maintain cardholder privacy:
    • If the returned account balance is lower than $200, the POS terminal prints out the exact balance (that is, "Balance Remaining: $58.65").
    • If the returned account balance is in excess of $200, the POS terminal prints out "Confirmed," rather than the dollar amounts (e.g., "Balance Remaining: Confirmed").

Protect Your Merchant Credit Card Processing Account Against Fraud

While processing the transaction authorization, always examine the card's security features. Any sign of alteration may signify that you are dealing with a counterfeit card.

If you get an authorization approval, but still suspect fraud, you will need to make a Code 10 call. You will be connected to the issuer's authorization center and a representative will ask you questions to verify the validity of the transaction. Follow her instructions on how to proceed with the transaction.

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